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Ballmer's Departure: A Win for Microsoft and Clippers

Steve Ballmer's decision to step down from Microsoft's board six months after "retiring" as the company's CEO (announced a year ago tomorrow) has once again put him in the limelight in the IT world, at least for a few days. The spotlight has already pointed to Ballmer in the sports world now that he shelled out an unprecedented $2 billion to purchase the Los Angeles Clippers and gave an infamous rally cry earlier this week on how his team will light the NBA on fire.

More power to him. I hope he brings the Clippers a championship ring -- maybe they become a dynasty. But at the same time, Ballmer's decision to step down from Microsoft's board appears to be a good move, whatever may have actually motivated him. Some may argue it's symbolic. Even though Ballmer is no longer on the board with voting rights, he's still the company's largest shareholder and if he was to align himself with activist investors, he could make his already audible voice heard. As such it would be foolish to write him off.

Following the news of his resignation from the board, I've seen a number of tweets and commentaries saying critics of Ballmer don't appreciate all he has done for Microsoft. Indeed Microsoft performed well during most of his 13-year reign, with consistent year-over-year revenue and profit growth. And products such as SharePoint grew from nothing to multi-billion-dollar businesses. Yet under Ballmer's watch, Microsoft seemed to have lost its way and the company that cut off Netscape's "air supply" lost its caché to companies like Apple and Google.

To those who think Ballmer is unappreciated, did Microsoft perform well because of or in spite of him? Consider this: As manager of the Atlanta Braves, New York Mets and St. Louis Cardinals, Joe Torre's teams performed abysmally. Yet his four World Series rings and year-over year appearances in the playoffs as skipper of the Yankees brought him praise as a great manager and a place in the Hall of Fame. As CEO of Novell, Eric Schmidt was unable to return the one-time networking giant to its former glory. As CEO of Google, he was a rock star. If Novell had hired Ballmer away from Microsoft, could he have saved the company from its continued decline? We'll never know for sure.

In my view, it all started with Ballmer's ill-advised attempt to acquire Yahoo in 2008 for $45 billion. Yahoo CEO Jerry Yang's foolhardy refusal to accept that astronomically generous offer at the time probably saved Microsoft from disaster. In retrospect, perhaps Ballmer was desperate, whether he knew it or not at the time. In 2008, Microsoft was late to the party with a hypervisor, delivering the first iteration of Hyper-V even though VMware had already set the standard for server virtualization.

Also at the time, maybe he realized, consciously or otherwise, that shrugging off the iPhone a year earlier sealed Microsoft's fate in the mobile phone business. Tablets and mobile phones were a market Microsoft could have owned or at least become a major player in had there been more vision. I remember Microsoft talking up technologies like the WinPad in the mid to late '90s and making feeble attempts to offer tablets that were effectively laptops which accepted pen input.

I wasn't planning to weigh in on Ballmer stepping down from the board until I read a review of the latest Windows Phone from HTC by Joanna Stern of The Wall Street Journal. The headline said it all: "HTC One for Windows: Another Great Phone You Probably Won't Buy." While praising the new phone, which actually is based on its popular Android-based device, Stern effectively said while Windows Phones are good, so were Sony Betamaxes (that's my analogy, not hers). Stern noted IDC's latest smartphone market share report, showing it sits at a mere 2.5 percent and not growing. In fact it has declined this quarter.

That got me thinking, once again, that the missteps with Windows Phone and Windows tablets all happened on the watch of Ballmer, who also let Apple and Google dominate the tablet market. To his credit, Ballmer acknowledged earlier this year that missing that market shift was his biggest regret. That still brings little consolation. Now Ballmer's successor, CEO Satya Nadella, is trying to move Microsoft forward with the hand he was dealt. Founder and former CEO Bill Gates sits on the board and is working with Nadella closely on strategic technical matters. Does Nadella also need the person whose mess he's cleaning up (including the fiefdoms that exist in Redmond) looking over his shoulder as a board member?

No one can overlook the passion Ballmer had at Microsoft, but his "developers, developers, developers" rant only went so far. Today most developers would rather program for iOS, Android and other platforms. Hence, it's fortunate that Ballmer has found a new passion. Maybe he can do with the Clippers what he couldn't do for Microsoft.

Posted by Jeffrey Schwartz on 08/22/2014 at 12:51 PM


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